E&O insurance stands for errors and omissions. This type of insurance also known as professional liability insurance helps protect a company from claims that arise due to errors or omissions in a deliverable or work product. It might seem obvious why a company that creates products or goods may have this type of protection. Whether you’re a mortgage banker or broker, you should consider E&O insurance coverage to protect your business from claims or lawsuits.
Why Do I Need E&O Insurance?
Professional indemnity for a mortgage broker or banker means protection for any mistakes made by you or a loan officer through the entire loan process. Even if a dissatisfied customer makes a claim without merit, such a policy can spare you the costs associated with a legal defense or settling claims. E&O insurance or professional liability insurance should not be confused with that of general liability. Unlike E&O, general liability does not protect you from claims due to mistakes or negligence in the work performed.
What Else Should I Consider?
Because the mortgage business involves access to sensitive information such as client’s personal and financial data, consider purchasing cyber insurance. Security breaches are a potential risk for your business. Choose an insurer that can tailor a complete E&O protection package that also addresses cybersecurity risks.